Coverage: Boeing to cut jobs amid stronger dollar

Boeing Co.’s commercial airplane unit said it would cut an as-yet-undetermined number of jobs in 2017 after slashing its workforce by 8 percent in 2016, as it struggles to sell planes in the face of a strong dollar.

Alwyn Scott of Reuters has the news:

The company did not say how many jobs it will cut next year, noting it is still assessing its 2017 budget and employment needs.

But the announcement shows the world’s biggest plane maker is axing jobs more aggressively than it forecast earlier this year, and that it will not let up the pressure to cut costs under the new chief executive of the airplane unit, Kevin McAllister, who succeeded Ray Conner on Nov. 21. Conner is now vice chairman of Boeing Co.

“To successfully compete and win new orders that will fund future product development and growth requires us to achieve much better performance,” Conner and McAllister said in a memo to Boeing Commercial Airplanes employees on Monday, which was made public.

Boeing “will need to do more in 2017” to lower costs and make its planes more affordable, the memo said.

Andrew McIntosh of the Puget Sound Business Journal reported that Boeing will try buyouts before implementing layoffs:

Boeing will launch the new buyout round in January, the executives said. They did not say how many workers they hope will take the offer, which spokesman Paul Bergman said is the same package offered in the 2016 voluntary layoffs.

“Employees who participate in the voluntary layoff program will receive a lump sum payment equal to one week of pay for each year they worked at Boeing, up to a maximum of 26 weeks,” he said.

The spending and job cuts cap a year in which Boeing Commercial airplanes significantly reduced its workforce and spending in the Puget Sound region, the Boeing executives said. They said they cut management ranks by 10 percent, without giving a precise number, and described a previously undisclosed freeze on discretionary travel affecting all BCA employees.

Boeing last week announced a 30 percent increase in the quarterly dividend payout to shareholders next year.

Dominic Gates of the Seattle Times reports that the cuts will be across the company:

Through November this year, Boeing eliminated just over 6,600 jobs in the state.

Conner and McAllister said all the units within the company are currently analyzing their 2017 budget and staffing plans, and soon will provide employees the details on which will be eligible for the voluntary buyouts.

They said they were giving the gloomy news now, just before the Christmas break, to leave employees in a position to “make plans and decisions for the coming year.”

A week ago, Boeing announced that in August it will cut the rate of its 777 widebody jet from seven jets per month to five, which likely means job cuts on the final-assembly line in Everett and in Frederickson, Pierce County, where the 777 wing skins and spars are fabricated.